I'm sure the dollars just didn't work out.

I'm not going to say that happy meals ruined MacDonalds, but it was once just a different fast-food restaurant to go to. After happy meals, MacDonalds became a place for parents to dread. Particularly after the introduction of chicken nuggets. The food in the happy meal appeals to limited tastes- salty, oily, sweet, and (most importantly) consistent. Massive advertising focused at children and the inclusion of a toy makes it a marketing steam roller.

And that all back fired. Parents held hostage by the situation grew to loath the offerings. Not because they were bad, but because they felt forced to go there to appease their kids. Negative reinforcement run amok.

That's a tricky position for companies that live and die by branding. Disney+MacDonalds was a juggernaut, but the relationship started to pick up too many negative connotations. That scared everyone who wrote checks.

The marketing tie-in toys were too similar and kids got bored with the repetition. Adults grew weary of the other offerings. Disney liked the exposure, but realized it was tarnishing their brand. MacDonalds growth slowed, and started flailing to re-attract adult audiences.